Investors are ignoring an enormous subsection of tech since it’s considered “taboo” – despite the indisputable fact that it is ready to be price $1 trillion by 2027.
The FemTech sector includes all innovations designed to resolve health issues suffered solely, in a different way, or disproportionately by women. It covers every part from health while pregnant and the menopause, to Alzheimer’s and HIV.
Women make up greater than 50% of the worldwide population, which suggests the goal marketplace for products specializing in their health is very large. But just 3.3% of digital health investment within the U.S. went towards women’s health between 2011 and 2020, in keeping with digital consultancy Rock Health.
And nurturing innovation inside the female health space doesn’t just profit women.
Research by Women’s Health Access Matters, a nonprofit organization focused on funding for girls’s health research, suggests that a $300 million investment into improving female health could generate around $13 billion for the worldwide economy.
Research by Women’s Health Access Matters suggests that a $300 million investment into improving female health could generate around $13 billion.
De Agostini Picture Library | De Agostini | Getty Images
“The opportunities and the potential for value creation of investing on this area is large,” Karen Taylor, research director of the Centre for Health Solutions at Deloitte told CNBC.
“So I feel if there was some more homework done by a few of these investors, they’d understand why that is an area that’s ripe for growth and investment.
“They only didn’t really get it”
Tania Boler created Elvie, a tech company focused on women’s health, in 2013 after she found a scarcity of products designed for brand new moms. Elvie’s primary products are pelvic floor trainers and portable breast pumps.
But not everybody took her latest business seriously.
“To be completely honest, the tech industry thought it was a joke,” Boler told CNBC.
“They only didn’t really get it … [and] in quite a couple of women’s health issues, the issue is that because there’s a scarcity of education, there’s a scarcity of demand. From an investment perspective it isn’t clear what the thesis is,” Boler said.
Personal understanding of a product is commonly key for investors, however the stats show that the majority investment decisions are made by men. A 2022 report by European Women in VC, a set of senior female enterprise capitalists, found that just 15% of VC general partners were female.
Despite the barriers, Elvie has gone big. It’s now certainly one of the biggest corporations within the FemTech space and has a revenue of $100 million. There are examples of ladies who’ve run marathons and performed surgery while expressing milk using Elvie pumps, which CEO Tania Boler said highlights the human impact of investing in women’s health.
“We went with a really strong message of empowerment, but at the identical time we tackle the taboos head-on, we do not draw back from that. And that starts the conversation,” Boler said.
The problem of not understanding women’s health – and the importance of female-specific health solutions – has deeper roots.
“Because it has been such a taboo topic, it’s really hard to beat,” Valerie Evans, consumer investor at enterprise capital fund The Craftory, said.
“Not because [investors] don’t need to know and never because they’re purposefully ignorant, but I feel it’s an overall societal problem that type of permeates the investing world.”
And while the variety of female investors is restricted, the gender balance inside company teams can even impact how difficult it’s to get backing.
‘Being offended feminists hasn’t worked’
Greater than 70% of FemTech corporations have a minimum of one female founder, in comparison with the 20% average, in keeping with McKinsey & Company.
But meaning the percentages are stacked against them.
Lower than 3% of enterprise capitalist funds went to female-led startups in 2020, in keeping with data from business school INSEAD, while female entrepreneurs are 63% less more likely to get VC funding than men.
Deloitte’s Taylor said female founders also generally ask investors for less money than their male counterparts, which could possibly be harming their prospects inside the space.
“There’s plenty of research that shows women are inclined to be rather more honest and play down what they imagine is the potential for his or her innovation,” she said. “Men are notorious for large sales and investors are used to it.”
Economies will grow when women can birth taxpayers and never die in the method
Brittany Barreto
Founder and CEO of FemHealth Insights
For Brittany Barreto, founding father of FemTech analytics platform FemHealth Insights, these figures emphasize the importance of startups taking accurate data to investors — so if they can not appeal to private experience (since the VCs are men), they will provide robust information.
“It was very vital that we follow the information a part of all of this because if we’re just offended feminists, that hasn’t worked yet. So I used to be like: let’s be scientists and let’s be business people,” Barreto said.
And the FemTech sector is growing at an astounding rate. Greater than 60% of FemTech startups were founded within the five years resulting in 2022, and there was a 1,000% increase within the number of companies within the space during the last 10 years, in keeping with FemHealth Insights research.
These growth rates — despite myriad obstacles — are encouraging for an industry that has been struggling to realize traction.
“I’m incredibly optimistic for the long run of ladies’s health,” Barreto said, stressing the large potential advantages for the world.
“The economic potential for countries in the event that they can empower women to feel higher, to live longer, live with more mobility?” she said. “Women have money. Economies will grow if we make women healthy.”